Select the INCORRECT statement from the below given statements.

Nominal Share Capital is a part of Authorized Share Capital

The correct answer is Option (1) → Nominal Share Capital is a part of Authorized Share Capital.

Nominal Share Capital is a part of Authorized Share Capital is the incorrect statement as nominal share capital is not a part of authorised share capital but it is another name for authorised capital.

1) Nominal Share Capital is a part of Authorized Share Capital- This is incorrect. Authorised capital is the amount of share capital which a company is authorised to issue by its Memorandum of Association. The company cannot raise more than the amount of capital as specified in the Memorandum of Association. It is also called Nominal or Registered capital. 

2) Un-issued Share Capital is a part of Authorized Share Capital- This is correct. Issued Capital is that part of the authorised capital which is actually issued to the public for subscription including the shares allotted to vendors and the signatories to the company’s memorandum. The authorised capital which is not offered for public subscription is known as ‘unissued capital’. Unissued capital may be offered for public subscription at a later date.

3) Un-Subscribed Share Capital is a part of Issued Share Capital- This is correct. Subscribed Capital is that part of the issued capital which has been actually subscribed by the public. When the shares offered for public subscription are subscribed fully by the public the issued capital and subscribed capital would be the same. It may be noted that ultimately, the subscribed capital may be equal to or less than the issued capital. In case the number of shares subscribed is less than what is offered, the company allots only the number of shares for which subscription has been received. In case it is higher than what is offered, the allotment will be equal to the offer. The unsubscribed share capital remains part of issued share capital.

4) Called up Share Capital is a part of Subscribed Share Capital- This is correct. Called up Capital is that part of the subscribed capital that has been called up on the shares, i.e., what the company has asked the shareholders to pay. The company may decide to call the entire amount or part of the face value of the shares, For example, if the face value (also called nominal value) of a share allotted is Rs. 10 and the company has called up only Rs. 7 per share, in that scenario, the called up capital is Rs. 7 per share. The remaining Rs. 3 may be collected from its shareholders as and when needed.